And will stay cheaper. Remember, thanks to fracking technology, the U.S. is fully energy independent gas-wise and is sitting on gas to last decades and decades.

At what cost to the environment??

Ummm... slight to none?

At what benefit to the people of the U.S.? Have you heard about the chemical companies already planning to move back here now that the basic precursor raw material is so unbelievably cheap here? Have you heard about the boomtowns in PA and ND? Have you seen people's ridiculously low heating bills this year (those who heat with nat gas)?

I will more or less do whatever the Joneses across the street do. If they drive more, so will I.

They too will do what I do. And as I drive more so will they.

Are you not capable of acting independently? We made changes over several years so that we could cut our transportation costs greatly. We drive one car most of the time (all of the time in the past 5 months).

Our family miles went from ~20K per year and more to 12,000 or less all together. This includes car pooling, shopping, kids' activities, out of town trips, etc. This did not happen by accident and it was not always the easiest choice. When gas does it's annual jump past $4 we are unhappy about it like our peers but the cost of gasoline isn't the huge deal it is for friends and coworkers - some who face over $15 per day in gasoline costs b/c of the length of commute or what they choose to drive.

When we bought our 25 mpg CUV 246,000 miles ago in '99 it was more efficient than most vehicles of it's type - see the S-10 Blazer for comparison. I paid $1.65 for the first gasoline I bought for our car. I paid $3.15 yesterday and expect it to double if not more during the next decade. Yeah my next new car will be chosen with that expectation in mind i.e. another four cylinder, a wagon vs minivan, truck or large SUV. If we have a thirsty vehicle it will be for occasional use only. Figure 250K miles at ~20 mpg and $5 gasoline... $62,500 for gasoline alone. I have better things to do with my money than wasting it buying gasoline....

The area I live in electric rates have been rising 3 to 5 percent a year the last couple years as SCANA has been allowed to raise rates in order to pay for construction of a new nuke plant. By raising rates now it reduces the amount they need to borrow reducing long term costs or so they say. The downside is I am using about 10 percent less power and yet my bills are higher than they were two years ago using more power.

At work we calculated we would need to reduce power use by at least 4 percent a year just to keep power costs flat. This has caused us to accelerate conversion of our studio lighting to LED based lighting, reducing power draw from 45 kilowatts to 8 kilowatts, not including the power savings in reduced cooling as well. The break even point is about three years at current rates.

So, if i am reading this right, proponents of the rebound effect are basically saying that progress doesn't help. Because i invent a tractor to plow my fields, there is now a surplus of horse drawn plows that other areas will now start using. Because they are using horse drawn plows more the rate if hay consumption has not gone down as much as we predicted by using the new tractor. Therefore the efficiency gained by the tractor isn't as much and we should continue to use horses.

There are no proponents or opponents of the 'rebound effect.' It's an effect, much like the greenhouse effect. Its magnitude and prevalence are what people argue about. I'm intrigued that this was called the 'rebound effect,' since it is very clearly the income and substitution effects I learned about as an undergrad economics major. In fact, the 'direct effect' is generally known in economics as the 'substitution effect,' i.e. the price goes of good x decreases relative to other goods, so you consume more of or "substitute into" x. The 'indirect effect' is actually the 'income effect,' i.e. a decrease in the price of x has increased your real income (holding consumption constant), so you decide to increase, decrease, or hold constant your consumption of x.

The tractor vs. horse plows analogy is wrong for this reason. The substitution effect of cheaper horse drawn plows is positive, but the income effect is negative. If you were the farmer who was using a horse drawn plow, would you buy more horses or save the money to buy a tractor? Horses are generally terribly costly compared to farming equipment, so farmers clearly would save the money to buy the tractor. As a practical matter, this is essentially what all farmers in the industrialized world did, apart from those with philosophical reasons for not using "technology."

From the economics literature I've read, which is admittedly limited, economic researchers generally consider energy efficiency and environmental health to be 'normal goods,' meaning they have positive income effects. (The opposite of these are 'inferior goods' like the horse drawn plow above.) The journal article's author clearly has this perspective, since he finds that the "indirect effect" is positive, but it indicates that the income and substitution effects are actually relatively significant.

I personally find it hard to generalize these problems. Consider the case of public bus transportation, which most people consider fuel efficient compared to cars. If the price of the bus fare goes down, a person riding the bus might start saving the extra real income he earns to buy a more convenient car, which is less efficient. If he earns a bit more income, he decides to buy a more fuel efficient car, which is more efficient. Overall, total emissions have probably increased since the man simply rode the bus, but have gone down from the usage of the cheap, high-emissions car.

There are probably all sorts of other effects as well, such as cross-good effects. Consider the case of people buying fuel efficient cars. Since the rebound effect for fuel efficient cars is positive, people tend drive more in fuel efficient cars. However, this tends to cause congestion on the roads, which might tend to constrain people from driving as much, or it might tend to cause higher emissions because it takes people longer to get from place to place. I would expect such an effect to be minor or negligible, but it might show up in the aggregate.

At the end of the day, the question is whether or not the real benefits of higher fuel economy, including the decrease from the rebound effect and others, are worth the extra production and r&d costs. For all I know, maybe they are. But answering that question requires accurate data and, as Mr. Feynman once famously said, a very high degree of honesty.

Not really. Even filthy bike riding hippies like me admit that renewable sources (presently at least) produce less energy and are not as reliable. Less reliable in the short to medium term, I mean. Coal & oil will stop being reliable when we run out, and if we "run out" of solar we have bigger problems.

If we have better efficiency in devices, then we stand an increased chance of being able to get away with renewables while their power and reliability remain less than fossil fuels. after all these are younger technologies than coal and gas fired power stations.

This will also have the benefit of making pilot programmes more likely to work, thus making attacks from fossil fuel funded opponents of renewables less easy. Actually, even if you are fully paid up anti-renewables, you should see efficeincy improvements as a good move. Prices are going to go up because people in China (1.3x10^9 pop.) & India (1x10^9 pop.) have money now and car companies are happy to take it.

A step further in the thinking leads to, "if we want to shift to renewables we would be well advised to improve the efficiency of our devices as well as looking for said renewable sources"

Even if the rebound effect were 100% of the energy saved, you drive more, enjoy more, produce more:You have economic growth at constant energy consumption.Which is arguably better than the current/previous model, which is economic growth at growing energy consumption.

Good to know that it's less than 100%.Also, it's worth noting that all the causes for the rebound effect can be triggered in reverse by taxing energy (reduced price efficiency at constant energy efficiency).

Coal & oil will stop being reliable when we run out, and if we "run out" of solar we have bigger problems.

I realize not everyone participating in this forum hails from the U.S., but from a U.S. point of view, the above concern is similar to worrying about "what if the Sun does not rise tomorrow, what do we do then?"

So, if i am reading this right, proponents of the rebound effect are basically saying that progress doesn't help. Because i invent a tractor to plow my fields, there is now a surplus of horse drawn plows that other areas will now start using. Because they are using horse drawn plows more the rate if hay consumption has not gone down as much as we predicted by using the new tractor. Therefore the efficiency gained by the tractor isn't as much and we should continue to use horses.

Exactly. All these arguments rest on simple extrapolation of first order effects, as if there are no other constraints on our behavior or that energy-using activities won't be totally restructured.

We've all been working with XavierItzmann's numbers here, but they're misleading.

XavierItzmann wrote:

In June 2011, the Electric Power Research Institute (EPRI), an independent science and research organization, released a report on technology innovation in electricity generation [...] in 2015, generating a megawatt-hour of electricity with natural gas will cost between $49 and $79, according to EPRI estimates. That same quantity of energy produced from onshore wind will cost between $75 and $138, while generating it with solar photovoltaic will cost at least $242 and as much as $455.

First off, the EPRI is a lobby group for the energy industry. As the organization states on its website, most of its members are electric utilities. The group has also been a proponent of non-existent "clean coal" technology.

I looked for another estimate of energy generation costs, and found a recent Department of Energy study. It uses levelized costs, which take into account construction, financing and operational costs over an assumed operational lifetime for a generating facility. Although EPRI's study is behind a paywall, it seems to be referring to operational costs, which in isolation are useless for assessing the cost of a particular form of energy generation. The DOE's levelized cost estimates for various forms of energy are:

The ratio in levelized cost per unit energy of natural gas to wind energy is not 1:4, but more like 2:3. These values are averages, but vary regionally. In some regions, wind approaches parity with natural gas.

There are other hurdles to overcome before renewables make up a large percentage of total power generation, however - load balancing. Wind and solar cannot be fired up on demand. If there are natural gas or coal plants in the mix, then these plants can adjust their output to manage the load. In order to eventually go over to 100% renewable energy generation, we'll need much better methods of energy storage than currently exist.

The takeaway here is that XavierItzmann's figures on electricity costs are significantly off, and in comparison to traditional power generation, renewable energy isn't as expensive as he claims. However, there's still a great deal of work to be done in developing energy storage to smooth out fluctuations in renewable energy generation.

Let's not quibble about the numbers. Fact: per your numbers, solar and wind are significantly more expensive than the current low cost alternative —natural gas—, and by huge factors of half again more costly to four times more costly.

And that's before people less sophisticated than you understand that you have to have both the spinning coal and gas plants in addition to the politically-connected, taxpayer subsidized wind and solar projects, thereby automatically further doubling costs.

Now go and explain to people making minimum wage why their monthly home power bill has to increase by 30% or 50% in the next few years.

[quote]And that's before people less sophisticated than you understand that you have to have both the spinning coal and gas plants in addition to the politically-connected, taxpayer subsidized wind and solar projects, thereby automatically further doubling costs.

Now go and explain to people making minimum wage why their monthly home power bill has to increase by 30% or 50% in the next few years.[quote]

And the fossil fuel companies are able to operate with more or less impunity b/c they AREN'T well connected? Plainly ALL the players who are well positioned are well connected.

Let's not quibble about the numbers. Fact: per your numbers, solar and wind are significantly more expensive than the current low cost alternative —natural gas—, and by huge factors of half again more costly to four times more costly.

And that's before people less sophisticated than you understand that you have to have both the spinning coal and gas plants in addition to the politically-connected, taxpayer subsidized wind and solar projects, thereby automatically further doubling costs.

Now go and explain to people making minimum wage why their monthly home power bill has to increase by 30% or 50% in the next few years.

A disagreement over 50% versus 60% would be quibbling. When you say wind is 300% to 900% more expensive than natural gas, when in reality the number is more like 50%, that is what I call gross exaggeration. In this discussion, you've left out the environmental and economic impact of burning fossil fuels. The levelized cost I listed above was for the cheapest, dirtiest form of natural gas. Assuming carbon control and sequestration technology is eventually developed, the DOE estimates that natural gas will cost 90.1 $/MWh, which is close to parity with wind energy.

There are additional costs involved in fossil fuel burning which are excluded from the levelized analysis, which does not take into account externalities, i.e. costs which the electric utilities do not have to bear themselves, but which society has to bear. The most obvious externality associated with the burning of fossil fuels is the cost associated with avoiding or mitigating global warming.

If you ask me what will become of people on minimum wage, who have to pay more for renewable energy, then my answer is this. Since avoiding fossil fuel emissions is an important societal goal, and since many poor people already have difficulty paying their utilities, the government should subsidize the energy bills of low-income earners. At the same time, there should be a significant push to move to renewable energy, both through subsidies and mandates on utilities, and through R&D spending on as-of-yet unresolved technical challenges, like efficient energy storage.

Since avoiding fossil fuel emissions is an important societal goal, and since many poor people already have difficulty paying their utilities, the government should subsidize the energy bills of low-income earners.

A thing of beauty: the answer to government control of the means of power production turns out to be socialized power bills. Why, maybe next you'll suggest that cradle-to-grave energy care is what the people need!

Now, since you want to quibble. I don't think your numbers are much better than my numbers. My numbers come from private enterprise, apparently. Your numbers come from government employees. Uf. Good luck with that. Who knows what political pressures, what career agendas where staked on the massaging of those numbers?

But in the interest of comity, I'll let slide the tendentious comment about gross exaggeration, and just opine that if I were you, I'd be double checking those government drone-issued figures. And my wallet.

The study is probably right, since the energy cost of operating anything is less than the total cost. Fuel is not the only cost of driving.

The downside comes when mandated efficiency drives down the usefulness of items. There are cases where that happens, but there are others where there is plenty of gains to be made.

I've seen improvements in "wall wart" power supplies over the years, they are a lot better, but I still see some that get plenty hot. Since there's a lot of variation, I expect some gains could be had by using good designs where wasteful ones are now used. I wish my home wireless devices were more efficient.

We try hard at work, energy costs are money. I see some room for improvement, but it's not large as a percentage.

I wish we used more nuclear power. It's really clean. Even if you count in mishaps, it's still cleaner than other sources, especially other 24/7 reliable afffordable sources.

nuclear energy isnt affordable right now. Setting up a nuclear plant is ridiculously expensive, and that is even before we consider the possibility of weaponization.

That being said, some of the newer technologies, if they work out could be great (traveling wave reactor, e.g). The nuclear weaponization risks would still remain though.

I understand the principle but the magnitude still seems high. Am I such an over-paid oddball, that I don't even think about the cost of gasoline when I drive or cost-per-load of my wash? Put it this way, improve my fuel cost by 30% and I don't think my driving would change even 1%.

For a household making US median income (about $45k), that's a pretty good chunk of change. Now imagine two cars driving that much.

So for that median household, gas is a big deal. From that perspective, I think it's easy to see how cheaper gas would noticably influence driving habits.

If gas is such a significant component of your income, wouldn't you try to avoid unnecessary travel? Cheaper travel would mean you increase your travel to meet all the necessary/important travel you were not being able to do because of gas prices earlier, but once you have reached that threshold, wouldn't you simply want to pocket the savings?

I think pretty much all waking hours of people in the developed world is spent in activities that consume energy. I think the real question for the most part is that would the shift in consumption patterns be from activities of high energy consumption/hour to low energy consumption/hour or vice versa.

For example, sure, cheaper travel may lead to more travel. But wouldn't that mean that people are at home less, so they switch off the central air conditioning in the house (more likely automatically, through something like a Nest thermostat) which in fact leads to lower net energy consumption?

But wouldn't that mean that people are at home less, so they switch off the central air conditioning in the house (more likely automatically, through something like a Nest thermostat) which in fact leads to lower net energy consumption?

The energy intensity associated to transportation dwarfs by orders of magnitude the energy intensity associated to air conditioning. I think it was on a previous thread here at Ars where someone compared the effect of one foot's misapplication on your car's accelerator (waste) to the impact of a wall-wart hooked to the wall year-round (waste).

Well VW made a $25M mistake - they put up that flawed technology called solar panels. They could have purchased a WV mtn and just had a company go in and strip mine the mtn top instead and burned the resulting coal for electricity and perhaps been better off - - - for a while.

Well VW made a $25M mistake - they put up that flawed technology called solar panels.

The plant will rely almost 90% on traditional energy sources during production. In order to operate the plant fully with solar, they would have had to cut trees on 300 acres, sufficient for 2,100 single-family homes. And as Thucydides411 explained above, the sad truth is that even with 300 acres of solar, utilities in TN would still have had to plan on spinning reserve capacity to power the entire plant during cloudy days and during night shifts.

Fun fact: if they had gone full solar, a full 1/4th of the cost of the plant would have gone to the solar plant alone, and not to the assembly lines.

Extra fun fact: if they had gone full solar, the solar plant area would be more than six times larger than the carmaking area. 6:1 area requirements!

But the fact remains they spent just $25M... to make a 12% solar power statement... the whole plant cost $1,000M.... so chalk up 2.5% of plant costs to good old greenwashing!

Since avoiding fossil fuel emissions is an important societal goal, and since many poor people already have difficulty paying their utilities, the government should subsidize the energy bills of low-income earners.

A thing of beauty: the answer to government control of the means of power production turns out to be socialized power bills. Why, maybe next you'll suggest that cradle-to-grave energy care is what the people need!

Then you only feigned concern for the needs of those who can't afford to pay for utilities. And you don't even begin to address the problem of global warming. I'm suggesting a way to mitigate global warming, and expressing concern for those who cannot afford basic utilities. You express concern for people who can't afford utilities when it suits you, or rather the natural gas industry, but are against helping them in any way, other than blocking any action on climate change. Your position is perfectly constructed to advance the interests of the natural gas industry, and no one else.

Let me ask you this: when someone can't pay their utilities bills in winter, but shutting off their utilities could make their home unlivable, should the government intervene? Nope, that might make your taxes go up, and your right to live in a world without taxes is more important than people having heat in winter, of course. Should the government take measures to curb greenhouse gas emissions? Not if it would impose any costs on you or any business, apparently. Selfishness has become a philosophy.

XavierItzmann wrote:

Now, since you want to quibble. I don't think your numbers are much better than my numbers. My numbers come from private enterprise, apparently. Your numbers come from government employees. Uf. Good luck with that. Who knows what political pressures, what career agendas where staked on the massaging of those numbers?

I trust government employees above the electric utilities lobby to write reports on the relative costs of various methods of energy generation. The partisan numbers you cited are not only way out of line with DOE estimates, but also with estimates from the UK and France. Moreover, the hackery of the numbers you gave is evident in the fact that they cite operational costs, which make natural gas appear much better than it is, rather than levelized costs, which give the true $/MWh of an energy source.

Some things do have a very strong rebound effect. At a gut level, I know if they added some lanes to highways around me (Los Angeles metro area) I imagine they'll be just as crowded. I don't drive some places at certain times just because I don't want to face wrath-of-god traffic. Add capacity and I'm sure more of us would clog up the roads again.

So to reduce usage we DECREASE efficiency? Less is more, war is peace. I say let SPEND the efficiency dividend, it will drive the economy, which will spur further innovation, which in turn will improve efficiency.

Moreover, now that heavy vehicles such as the VW Touareg can do 24MPG, it is very easy for any rational person looking for a tall, safe vehicle to just go ahead and buy the heavy behemoth instead of a light VW Jetta that used to do the same 24MPG just a few years ago.

Rebound effect can literally zero out any mandates in many cases.

"tall, safe vehicle" Those adjectives are polar opposite. Less likely to die in a front-end collision in a SUV, but over-all more likely to die from all the other ways, which makes the average much worse.

Since avoiding fossil fuel emissions is an important societal goal, and since many poor people already have difficulty paying their utilities, the government should subsidize the energy bills of low-income earners.

A thing of beauty: the answer to government control of the means of power production turns out to be socialized power bills. Why, maybe next you'll suggest that cradle-to-grave energy care is what the people need!

Then you only feigned concern for the needs of those who can't afford to pay for utilities.

Your bad faith is shown in assuming I was feigning.

Actually the best that can be done for those in need is to today lower the price of power, via de-regulation and via the elimination of costly, politically-mandated boondoggles that require utilities to purchase expensive power from politically-favored energy sources, driving up monthly power bills.

Deregulation frees up creative entrepreneurs to create jobs and make the country prosper. A rising tide lifts all boats, you know?

There is some truth in the rebound argument but I think in the end it balances out. My Harley Sportster, which can get over 60mpg on 2 lane back roads, allows me to indulge in my photography hobby by traveling around the Adirondacks without much thought to the expense of gasoline. On an average weekend, I will burn a tank of gas and ride anywhere from 100 to 200 miles. I would still do that in the car but probably to shorter distances on the average. But I also ride the bike to work, a 70 mile round trip every day which saves a whole lot more fuel. I think I'm safe in saying that that over the course of a year, my Harley saves a lot of fuel.

One more thing to note. When anyone first buys a fuel efficient vehicle, there is the initial burst of extra driving but that wears off. Buying energy efficient appliances always saves I think. I don't think anyone buys LED light bulbs and then decides to never turn them off because they are cheaper to use. As for me, the money I save doesn't get spent on more energy hogging devices but gets squandered away on food, clothing, and shelter.

As for me, the money I save doesn't get spent on more energy hogging devices but gets squandered away on food, clothing, and shelter.

I'd say the same for saving of money on other things as well. Some of my social circle spends alot of money we don't on cellphones, cars and cable TV. We have a similar income and spend it too but on our mortgage, better food, and other adventures. I don't drive more b/c I use less fuel. We too always opt for energy efficient appliances come replacement time. Our most recent big purchase was a Trane hybrid heat pump/gas furnace in Jan 2012.

But the fact remains they spent just $25M... to make a 12% solar power statement... the whole plant cost $1,000M.... so chalk up 2.5% of plant costs to good old greenwashing!

Their money though - right?

Okay so they made a big expensive choice. It'll be one that makes power for the next 25 years. Not a small amount of energy savings...

Ohh, absolutely VW's money. VW is certainly free to throw money down a pit, if they feel like it! And more power to them!

But the big clue that this is not an economical project (i.e., there is no inherent ROI on it) is that their solar plant only produces 12% of the power necessary for car production operations. If the solar plant had an inherently positive ROI, logically VW should have made the solar plant produce 100%. It's not like VW is cash starved, or anything.

But the fact remains they spent just $25M... to make a 12% solar power statement... the whole plant cost $1,000M.... so chalk up 2.5% of plant costs to good old greenwashing!

Their money though - right?

Okay so they made a big expensive choice. It'll be one that makes power for the next 25 years. Not a small amount of energy savings...

Ohh, absolutely VW's money. VW is certainly free to throw money down a pit, if they feel like it! And more power to them!

But the big clue that this is not an economical project (i.e., there is no inherent ROI on it) is that their solar plant only produces 12% of the power necessary for car production operations. If the solar plant had an inherently positive ROI, logically VW should have made the solar plant produce 100%. It's not like VW is cash starved, or anything.

The rebound effect doesn't operate at an individual level. All discussion about whether I will or will not behave differently is beside the point. It operates at an industry and economy level. What happens is substitution, not more use, and also innovation.

As someone points out, energy costs of steel production fall, steel prices fall, this means more steel is used for things previously uneconomic, and so demand rises, and revenues of steel producers rise. We have seen this in our own lifetimes with computers. Revenues rise though costs per unit of computing have gone through the floor.

The rebound phenomenon is that increased efficiency does not lead to reduced demand for an economy as a whole. It may be that my trips to the mall use less gas. But the total demand for gas rises, very often enough to lead to rise in revenues for the gas industry. For instance, because its cheaper to drive, we have more people building out of town stores, we have more people taking vacations involving driving, we have more out of town workplaces, and more commuting. I however do not see any of this, I drive to the same mall and my gas consumption has fallen a bit. What rebound, I ask?

This does not mean, and no-one argues, that increased efficiency is not good. It is, it may be very profitable, it may lead to rapid growth for companies bringing it about, it may lead to rising standard of living. But its not the answer if what you want to do is lower total consumption and use of a given commodity.

You might, for instance, increase the efficiency of air conditioners. And that might reduce my own bills in Chicago, might even after my extra use of the things save electricity for me.

But it will also make it cheaper to live in Phoenix, and that will lead to more people living there, and so the end result will be more air-con use and sales.

That is the rebound effect. Its not individual. Like a lot of other things in this general area, its collective.